The tech economy in Vancouver and across Canada has never looked brighter. Yet the reality, in some respects, has never been bleaker.

The B.C. government recently announced the launch of a $100-million venture capital fund to accelerate local startups, and schools province-wide are introducing computer coding into the curriculum. Federally, technology and innovation are finally being embraced as economic drivers, as oil and resources lose their lustre. To wit, the total value of tech and innovation companies listed on the Toronto Stock Exchange is now greater than the aggregate value of the mining sector.

But there’s one enormous cloud looming on the horizon — housing affordability. It’s no secret that Vancouver housing is increasingly unaffordable. (The same goes for Toronto, to a slightly lesser extent.) In a recent report Vancouver was listed as the third least affordable city in the world to buy a home, more costly than New York or London.

The average price of a single-family home in Greater Vancouver (an area that embraces not just downtown but peripheral cities up to an hour or more away) is now more than $1.8 million. Median condo prices are pushing $500,000. All this has happened at dizzying speed, with values roughly doubling in just a decade, figures from the MLS Home Price Index show.

An influx of global capital has affected the local real real estate market, though that’s far from the sole cause. The population of Metro Vancouver is growing at a clip of roughly 30,000 residents each year, fueled primarily by immigration from abroad. Low-cost borrowing and fast-rising home values have driven purchases for investments, rather than as a place to live. And Vancouver’s geography — hemmed in by mountains and ocean, with limited space for development — is only compounding the issue.

The consequence of this is impossible to overlook. Unaffordability is emptying Vancouver of one of its most valuable assets — young people who grew up in the city and who are invested in it. As well, qualified newcomers who could bring talent, drive and vision to Vancouver are looking elsewhere. The projected closure of more than a dozen Vancouver public schools hints at the scale of the problem: Families can no longer afford to live here.

This is worrying for several reasons, chief among them that it makes it exceptionally hard to grow a business in Vancouver. I’ve experienced this firsthand at my company, but it’s hardly unique to the technology sector. Qualified job candidates are deterred from moving to the city and great employees are leaving because they can’t afford to build a life here. Even finding a rental property in Vancouver has become a feat. Vacancy rates hover at around 0.6 per cent (worse than in Manhattan), with one-bedroom condos easily topping $2,000 a month.

This lack of affordable housing has reached a crisis point. Vancouver risks becoming an economic ghost town: a city with no viable economy, other than a service industry catering to wealthy residents and tourists. The people who give Vancouver its vitality and identity will continue leaving. The kinds of businesses offering career growth and opportunity will fold or move elsewhere. And the city will miss out on the very tech boom whose promise now seems so near — a fourth industrial revolution enabled by data and computing power.

To fix its unaffordability issues, Vancouver needs to grow up, and fast, and that requires a concerted approach that looks at all of the contributing factors. Most fixes now focus on stemming the demand for real estate. One proposal calls for a surcharge of 1.5 per cent on vacant or rarely used residential property in the city to combat absentee foreign ownership and empty condos, which are said to account for nearly 25 per cent of units in certain neighbourhoods.

Ultimately, though, restricting demand is not enough. Vancouver urgently needs to increase supply. To measurably improve housing choices and affordability, we need to densify. This isn’t an easy conversation: It requires letting go of the notion of Vancouver as village and the single-family home as the paradigm. Some neighbourhoods will fundamentally and irreversibly change. But it’s a transformation long overdue and, most importantly, it will allow those who love Vancouver to live and work here.

Today, the city consists of a few square kilometres of high-rises in a tiny downtown core, hemmed in by a sea of single-family homes. This approach to urban development no longer makes sense. In large part, Vancouver’s restrictive zoning is responsible for the limited supply of housing and goes a long way toward explaining the inaccessible prices.

The city will miss out on the very tech boom whose promise now seems so near

The city has started down the path toward densification, in fits and starts. The Cambie Corridor between downtown and Vancouver International Airport, for example, is undergoing a dramatic transformation sparked by the Canada Line transit route, with single-family homes being replaced by higher-density housing. Other areas along transit routes and near commercial centres are obvious candidates for future efforts. Suggested alternatives such as “quiet density” — laneway homes and multi-family dwellings such as duplexes — are steps in the right direction but are ultimately insufficient given the scope of the problem.

Nick Procaylo/Postmedia files

No one wants to see a tree-lined block plowed under to make way for a mega tower. But livability doesn’t mean much if you can’t afford to live here. It’s breeding resentment and disengagement. The undercurrent of frustration is everywhere, impossible to miss. Even long-time homeowners who have benefitted from rocketing real estate prices must sense this.

Yet, conversations at the highest levels have been noticeably lacking. Vancouver desperately needs all government stakeholders — local, provincial and federal — to come to the table and begin the search for solutions in earnest.

Fixing Vancouver’s housing crisis starts with acknowledging the scope of the problem and then finding a way to move forward that addresses both supply and demand issues. More than just the promise of the tech economy is at stake. The cultural and creative capital Vancouver has accumulated for generations is being drained.

Ryan Holmes, CEO of HootSuite, is an angel investor and advisor, and mentors startups and entrepreneurs.

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